A good venture capital proforma should show all years from present through exit to demonstrate your ability to SCALE, justify VALUATION, and plan for EXIT.
Many entrepreneurs and VCs alike are hesitant to produce a proforma for more than two years out into the future. They claim that it’s impossible to know what will happen and that the third year and beyond are “just numbers.” While I would agree that nobody expects a startup to perform according to its projections, I am heartily in disagreement with the claim that a five year proforma doesn’t tell us anything.
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Via Marty Koenig